Remittance rises in January, highest in seven months

Migrant workers sent home $2.1 billion in January, the highest in seven months, thanks to the outflow of a record number of workers who went abroad for jobs in 2023, central bank figures showed today.

Last month's receipts were 8 percent higher year-on-year from $1.95 billion, which is expected to ease pressure on the country's balance of payments (BoP), a statement of economic transactions of an economy with the rest of the world.

Including the inflow in January, remittance inflow grew 3 percent to $12.89 billion in the July-January period of fiscal year 2023-24.

Remittance is one of the major sources of foreign currency for Bangladesh apart from export.

The money sent by migrant working abroad play a vital role in Bangladesh's BoP, which has been under pressure for more than two years as the outflow of funds for imports and other payments has been higher than the inflow of foreign exchange in the form of remittance, export earnings, foreign investment and credit.

Besides, Bangladesh Bank sold $28.7 billion worth of US dollars to banks in the country over the past two-and-a-half years to enable them to clear various bills, which caused the reserves to fall gradually.

However, the latest inflow of remittance contrasts with the outflow of migrant workers in the two years.

Including 13 lakh people leaving for jobs abroad in 2023, more than 20 lakh people got jobs on foreign soil over the two-year period, which raised expectations that inflow will grow at a higher pace.

However, the growth remains low with analysts blaming money transfers through an informal channel popularly known as hundi, which offers higher exchange rates and more convenience compared to official channels.

Ali Haider Chowdhury, secretary general of the Bangladesh Association of International Recruiting Agencies, said remittance inflow would increase if migrants working abroad can send their income without hassle.

"We have people who have gone to various countries either formally and informally. There are many individuals who have flown to foreign countries through formal channels but later become undocumented. So, they cannot send money through formal channels," he said.

"As such, facilities should be developed so that anyone can send money through formal channels," Chowdhury added.

He also said a migrant worker has to take leave from his or her employer if the person wants to send money by official channel.

By contrast, agents of people engaged in money transfer through unofficial routes go to the places migrants stay and offer higher rates for the foreign currency than the official rate.

"So, policymakers should consult with all stakeholders, including the migrant worker's community, in order to increase flow of remittance through formal channels," Chowdhury added.